Currently, the AUD/USD pair trades -0.30% lower at 0.6984, retreating from session lows reached at 0.6967 in last hours. The AUD/USD pair reversed its initial bid tone and slipped back below 0.70 barrier after a renewed bout of risk-aversion hit the European markets as oil prices resumed its slide. Therefore, the AUD bulls were sold-into the vanishing demand for higher-yielding currencies as risk-sentiment worsened.

Earlier in Asia, AUD/USD peaked at 0.7031 levels after the extension of last Friday’s rally in stocks and oil lifted the sentiment around the AUD. Meanwhile, markets now await the Australian inflation report due out on Wednesday ahead of the FOMC decision, fresh direction on the major.
AUD/USD Levels to watch

The pair heads higher and finds the immediate resistance at 0.6996/07 (20-DMA/ 1h 20-SMA/ daily R2) above which gains could be extended to the next hurdle located at 0.7050 (Jan 13 High/ psychological levels). On the flip side, the immediate support located at 0.6946/38 (1h 100 & 200-SMA) Selling pressure is likely to intensify below the last, dragging the Aussie to 0.6900.
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